Gambling Compliance: How to Add Extra Layer of Protection

In the high-stakes world of gambling and gaming, operators know that staying compliant with ever-evolving regulations is nothing short of a full-time job. Given the significant fines, reputational damage, and potential loss of license that comes with non-compliance, gambling operators are constantly seeking solutions to strengthen their compliance programs.

For online gambling venues, the major challenges of maintaining compliance come from differences in state and federal laws, evolving regulations, and bad actors that threaten compliance by spoofing their information to skirt identity and location checks.

Major challenges with compliance in the gaming industry

The laws around online gambling in the United States vary by state and jurisdiction, which makes maintaining compliance kind like shooting at a moving target.

Like any other online platform that handles money and payments, online casinos are subject to strict know-your-customer (or KYC) regulations which ensure their products aren’t used to launder money. Operators usually satisfy KYC by performing identity checks at onboarding for new users, which also satisfies the need for age verification. However, with synthetic identity fraud on the rise in the United States, the stakes are high to ensure that any ID or other verification information is real and accurate.

If someone manages to use an online casino using falsified credentials, it can lead to a fine for the platform or even being used as a link in a money laundering chain. Additionally, if a bad actor uses a falsified ID to join the platform, that also means that they can commit fraud and abuse on the platform with lesser risk of being caught and punished.

Another major challenge facing online gambling platforms and casino apps is ensuring that only people who are legally allowed to game based on their geographical location can use the platform. This poses a challenge that isn’t shared by traditional brick-and-mortar casinos; since their buildings are within an approved zone, anyone inside them is jurisdictionally compliant by default.

Online gaming shakes things up a bit. One of the strengths of online gambling is that it can offer users an engaging play experience from the comfort of their own homes, but moving gambling online also creates opportunities for bad actors to exploit. If someone who lives in New York, where online gambling is illegal, spoofs their location to say that they’re actually in New Jersey, where online gambling is legal, they can use the platform and cause a compliance violation that could cost the platform thousands in fines.

Naturally, online gambling operators have solutions in place to help manage these risks. Geolocation compliance technology gathers location data from user devices to ensure the user is in an approved zone, while database checks can be used to help verify identity information. However, as proficient as gambling operators are in stopping fraud and illegal betting, bad actors are developing proficiency of their own that allows them to get around these solutions. 

Adding an extra layer of protection for online gaming compliance

Having compliance solutions in place is table stakes for an online gambling platform. That said, bad actors are constantly adapting new ways to break laws and outfox the security measures put in place to keep them out. This means that one of the best ways to stay in compliance is to build some redundancy into any location or identity verification stack.

Take geolocation as an example. With one location solution in place, a bad actor might be able to spoof their location and violate compliance despite the operators’ efforts. With another solution for added protection, however, there’s another layer of defense in place to catch what the first layer misses. This same logic is why Incognia combines our location intelligence signal with device integrity checks when we scan for location spoofing tools. When it comes to mitigating risk, the more layers of security you can have, the better.

The evolving landscape of online gaming presents unique regulatory challenges, particularly regarding legal compliance. The consequences of failing to maintain compliance can include significant fines, reputational damage, and even potential loss of license. The key to effectively navigating this landscape lies in integrating robust, redundant security measures into the identity and location verification processes.

By employing sophisticated tools and building in multiple layers of security, operators can create an ironclad risk management strategy, ensuring a safer, compliant, and more enjoyable gaming experience for all users.